16th July 2018
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Subsidised cafes reviewed

, by , in Public Affairs

By NEIL RIDDELL

The days of eating bacon rolls, sandwiches and hot meals subsidised by the public purse could become a thing of the past under a wide-ranging review into the operation of catering facilities at SIC and charitable trust buildings.

Last week the charitable trust had to step in to bail out the struggling Horizons Cafe at the Clickimin Leisure Centre for the next four months until the conclusion of the “long overdue” investigation into publicly-subsidised catering, which is being carried out by the SIC’s head of economic development Neil Grant.

Trustees approved an emergency £20,000 budget to allow the cafe to remain open until the summer while the review is completed after Shetland Recreational Trust revealed that the Horizons operation is now losing some £5,000 a month and was on the verge of having to close, which would have led to the loss of a number of jobs.

Other catering outlets including cafeterias at Islesburgh and Bonhoga Gallery are to come under the microscope in the review. Many trustees last Thursday voiced the view that it was “not before time” because of growing concerns about the knock-on impact on private businesses trying to compete with publicly-subsidised cafés.

Mr Grant’s review should be completed later this month and there was talk among trustees of looking at different models, including the possibility of introducing franchise operations, though Allan Wishart pointed out that in some cases franchises can prove to be more costly than direct subsidy. He said the key was to ensure the different subsidised organisations were being dealt with in an even-handed manner, particularly as they are competing with one another as well as the private sector.

Councillor-trustee Betty Fullerton said it was well worth looking at franchises and said it was no longer appropriate for public money to be subsidising cafés. “I hope we’re going to do something radically different,” she said.

In a letter which went before the trust at last week’s meeting in Lerwick Town Hall, SRT general manger James Johnston said the loss Horizons was making – a decade ago the trust agreed to fund a smaller deficit of around £8,000 a year at 1999 prices – had grown substantially in recent times.

“The level of deficit over the last two years has grown considerably to a critical level that requires immediate action,” he wrote. “I believe that the SRT are not alone and this issue is common amongst public sector catering. Concerns have been raised in the media regarding the level of subsidy required to operate these catering facilities.”

There was a lengthy debate in the chamber over whether to grant the £20,000, during which it appeared that some trustees were intent on trying to set the price of a bag of crisps or a can of juice, before the additional money was eventually approved by a margin of 10-7. One trustee said afterwards that it had been a classic example of the penchant some councillor-trustees have for taking micro-management of arms-length bodies too far.

Trust chairman Bill Manson backed the grant, saying that the SRT had “no slack” in its budget and that if their request was not approved the café would have to be closed. He said children using the recreational facilities at Clickimin would inevitably want to go somewhere for food after exercising and he did not to want them going to Commercial Street and loitering.

Councillor-trustee Allison Duncan agreed with that and went a step further, saying that if youngsters did not have a café in the Clickimin to go to it was conceivable that they might end up on the streets getting involved in a world of petty crime, drugs, alcohol and knives.

Mr Manson agreed to incorporate a proposal from councillor-trustee Josie Simpson, who argued that the prices being charged in the cafe were too cheap and that the money should only be granted on the condition they were raised more or less across the board by five per cent for the next four months. Caroline Miller objected and said price “hikes” would only make things worse, but she was unable to find any support.

Councillor-trustee Alastair Cooper said that by dishing out the extra cash, trustees would be abrogating their responsibilities, pointing out that the SRT has been given £3 million with which to run a business effectively. He said: “This trust is interfering in the management of Shetland Recreational Trust. They have to realise what the effect is. It’s incumbent on them to use that money wisely.”

Independent trustee John Scott agreed and said granting the money would set a precedent after which the trust would start handing out £20,000 every month to all and sundry. He said: “All the rest are going to trot along and say ‘the same for me thanks’”.

Although only passing mention was made by Mr Cooper at last week’s trust meeting, there is also the matter of Mareel and its accompanying business plan, which projects takings of almost £400,000 at its cafe-bar to help break even. The trust has agreed to subsidise the cinema and music venue’s running costs to the tune of £100,000 in its first year – after which Mareel should theoretically pay for itself, though even many backers of the project are highly sceptical on that point.

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